The Trade Ministry is hoping that a regulation on e-commerce activities will be implemented in January, emphasizing that implementation will mean that all business players in the e-commerce sector will have a stronger legal base to carry out their operations.

Widodo, the ministry’s director general for standards and consumer protection, said Monday that the draft regulation, which contains the requirements for companies involved in e-commerce to register their operations and to meet the Indonesian National Standards (SNI) for their products, was currently being finalized.

“The draft regulation should be finished this year,” he said before going on to explain that, so far, the regulation for e-commerce trade had been limited to the Consumer Protection Law, which stipulates that the ordered goods must live up to what has been promised. If goods do not align with advertisement claims, the consumer can contact the ministry to process a complaint. Widodo cited a punishment of up to five years in prison and Rp 2 billion in fines. With the revision of the regulation, e-commerce traders should also comply with the obligation to have an SNI label and a label in Indonesian on certain products, as regulated by ministerial regulations No. 72 and 73.

“If they import goods and they can not provide NPB [goods registration number], recipients would be stopped in the customs office,” he said. The e-commerce draft regulation also requires that traders register.

“These days, there are a lot of e-commerce traders that we don’t know about. With registration, we will know their identity,” he said.

He emphasized that the proposed regulation was necessary in order to regulate rapidly growing e-commerce within the country as, reportedly, e-commerce transactions had been estimated to have risen by 50 percent from the $8 billion listed in 2013 to US$12 billion in 2014.

Indonesia is forecast to be the largest e-commerce market in Southeast Asia in terms of value, as Internet penetration and smartphone users have been forecast to hit 55 percent and 41 percent, respectively, in the next two years.

The Indonesian E-commerce Association (idEA) has expressed concerns over the draft regulation prepared by the Trade Ministry, saying that the proposed legislation might prevent small e-commerce business from growing, citing a lack of clarity on liability for each e-commerce party, certainty on law enforcement for the e-commerce players, as well as concerns over the complicated registration procedure as part of their issue.

Trade Ministry director for enterprise development Fetnayeti said that the ministry had tried to accommodate the association’s aspiration by conducting at least three public hearings.

“We don’t want to make it harder [for the e-commerce industry], we want to help it thrive,” she said, adding that during the last meeting with the association, the ministry had made some changes to the regulation, although she declined to specify.

Fetnayeti also said that the ministry continue to mull over the mechanism for registration, designed to provide an identity number for e-commerce operators. She added that the people who already had a business permit (SIUP) would not be required to provide as many documents as the permit already required submission of these. (fsu)